Pakistani rupee plunges about 6 percent in what traders say could be a central bank devaluation

Asif Hassan/AFP/Getty Images

A Pakistani dealer counts US dollars at a currency exchange shop in Karachi on October 9, 2018.

The Pakistani rupee plunged about 6 percent on Friday in what dealers suspected was the sixth currency devaluation by the central bank in the past 12 months, linking the move to ongoing bailout talks with the International Monetary Fund (IMF).

The rupee has lost about 35 percent since the first devaluation in December 2017, as officials have sought to bring under control a ballooning current deficit that threatens to trigger a balance of payments crisis.

Published 1:40 AM ET Fri, 30 Nov 2018
Reuters

The Pakistani rupee plunged about 6 percent on Friday in what dealers suspected was the sixth currency devaluation by the central bank in the past 12 months, linking the move to ongoing bailout talks with the International Monetary Fund (IMF).

The rupee tumbled to about 143 per dollar in early trading before paring some of the losses to trade at 141/142 level, or about 5.5 percent weaker by 0515 GMT, market participants said.

The rupee has lost about 35 percent since the first devaluation in December 2017, as officials have sought to bring under control a ballooning current deficit that threatens to trigger a balance of payments crisis.

This month Pakistani and the IMF failed to agree on a bailout package during a visit by an IMF delegation, with Pakistani officials setting mid-January as the target date for the country to obtain its second assistance package since 2013, when the IMF loaned Pakistan$6.7 billion.

"It's positive. If they're doing what IMF is telling them, and they go for the bailout, it's a good thing for the economy," said Saad Hashemy, chief economist at local brokerage Topline Securities.